Happy Birthday Betamax, Old Friend; Here's To The Thirty Years Of Innovation You Enabled

from the and-thank-you,-supreme-court,-for-getting-it-right dept

30 years ago today, the Supreme Court ruled that creators of the Sony Betamax VCR and other new technologies could not be held liable for acts of copyright infringement as long as the device is capable of substantial legitimate uses. This ruling has become the Magna Carta of the technology industry and an ironic gift to the content interests who fought it tooth and nail.

By ruling that people have a right to record over-the-air broadcasting for private use, the Betamax court clarified the rights of copyright holders, innovators and users. In doing so, it enabled a surge of new products, from the DVD to portable music players to online services. It is not hyperbole to say that ruling gave innovators wings, allowing them to bring new technologies to market without asking the content industry for permission first.

Big content fought hard against the Sony Betamax, making wild claims in Washington about how this new product would lead to the destruction of the American film industry. Of course, the opposite happened. While big content obsessed about the "record" button, users focused on the "play" button. The result? A multi-billion dollar industry in pre-recorded media, which now accounts for the majority of Hollywood's profits. This entire revenue stream would not exist but for Justice Stevens, who disregarded content industry pleas and cast the deciding vote in a razor-thin 5-4 decision.

Now Betamax is back in the news, as the broadcasters decry yet another innovation that they claim will destroy their industry. This time the culprit is Aereo, a service that uses individual antennas to send local, free, over-the-air broadcast programming to users' mobile devices. It's a boon to the public, especially to viewers in dense urban areas with broadcast reception challenges.

While the broadcasters acknowledge your right to put up an antenna and run a wire to your TV set, they claim that doing the exact same thing remotely (i.e. simply though a longer wire) is somehow illegal. Their contention has serious implications, especially to the nascent and burgeoning cloud computing and storage industries. Indeed, the Aereo case can be viewed as a backdoor attack on the Cablevision case, in which a federal court affirmed the legality of a remotely controlled digital video recorder (DVR). This decision has unleashed waves of investment and the provision of extraordinary new services to internet users.

The broadcasters fighting Aereo are the very same ones who have been granted billions of dollars in public spectrum at zero cost. As a condition of this massive government subsidy, they are obligated to provide the public with widely available, free programming – exactly what Aereo enables. Rather than embracing technologies that promote access, some networks even claim they will halt over-the-air broadcasting if Aereo is found to be legal. Broadcasters must make their own decisions – but if they believe that broadcasting is no longer a viable business, they should promptly return their spectrum to the public to be used for wireless internet and other productive uses.

Over the last three decades, the technology landscape has changed dramatically. But some things remain the same: legacy industries complain that new services or products disrupt business models, and run to the courts or Congress for relief. But this creative destruction is the story of human progress. Innovation disrupts, new business models arise, unsustainable models die and society reaps the benefits.

I hope that broadcasters eventually recognize the clear lesson of Betamax: embracing new technologies and providing their viewers with extraordinary cutting-edge services will benefit all our industries. I'm glad the Supreme Court has taken this case, and I hope that it will rule for Aereo, innovation and users.

Michael Petricone is Senior Vice President of Government and Regulatory Affairs for the Consumer Electronics Association

Filed Under: betamax, big content, copyright, fair use, innovation
Companies: aereo, sony